Commodity trader partners get $5.9bn payout after oil price rise

SENIOR traders and partners at commodities giant Trafigura will share a $5.9bn (£4.7bn) dividend after the energy crisis triggered a profit surge.

The company’s 1,200 staff, who are all shareholders, will receive an average $5m each, with some employees expected to receive significantly more.

The payout is a direct consequence of last year’s surge in the prices of oil and gas, linked to Russia’s invasion of Ukraine. The trading company posted net profits of $7.4bn in 2023, up from $7bn a year earlier, to mark the fourth successive year of record earnings.

In a statement it said the stabilising of global energy markets since Russia’s invasion meant profits looked set to fall in 2024. However, it added: “Markets and supply chains remain fragile and prone to turbulence linked to heightened geopolitical tensions, low stock levels and weak elasticity of supply and that could change this outlook.”

Jeremy Weir, chief executive of Trafigura, said: “We face uncertain times. Low inventories, geopolitical threats, elections in nearly two thirds of the democratic world in 2024 and brittle supply chains mean markets are fragile and vulnerable to spikes driven by sudden changes in supply and demand.”

The price of oil is on track for its worst downturn in five years. Global benchmark Brent looks set for a seventh consecutive weekly fall despite pledges by the Opec+ cartel to cut production in an attempt to prop up prices. It is currently trading at $71 per barrel, having hit close to $100 in September.

Trafigura, founded in 1993, employs more than 12,000 people based in 60 offices around the world. Its headquarters are in Singapore but most staff are based in Geneva. The employee-owned company has become one of the world’s leading suppliers of gas, oil refined products, plus metals and minerals.

Its metals, minerals and bulk commodities division reported an operating profit before depreciation and amortisation of $1.6bn, down from $1.9bn a year earlier after it was hit hard by a major nickel fraud scandal resulting in an impairment of $590m. Without the impairment it would have reported an operating profit of $2.2bn.

The company is dealing with investigations by regulatory authorities in Brazil, Switzerland and the United States.

It set aside $127m to cover a possible US Department of Justice fine to end an investigation into “improper payments” by the company in Brazil a decade ago.

The volume of oil and products eased to 6.3m barrels per day (bpd), from 6.6m bpd last year and 7m bpd in 2021. Some of the drop was linked to the ending of the company’s Russian oil contracts because of Western sanctions, but volumes have stabilised, Trafigura said.